North Korea military appears to back Kim Jong-il succession

North Korea's military has nominated the third son of ailing leader Kim Jong-il as a delegate to a rare meeting of the ruling party, a South Korean newspaper said, supporting reports he is his father's chosen successor.

In isolated North Korea, the backing of the army is seen as vital in a smooth power transition, particularly given the younger Kim's inexperience.

Kim Jong-un, believed to be in his mid-20s, is expected to be anointed eventual successor at a Workers' Party conference starting on Tuesday, when experts say he will likely be given his first official role.

Chosun Ilbo cited sources as saying the army had nominated both the father and son as its delegates to the biggest party meeting in three decades.

It added that while only Kim Jong-il's election was publicly known, "Kim Jong-un's election as a delegate is widely known among executives of the North Korean People's Army."

Regional powers will all be watching for clues as to how the transfer of power proceeds in the country with enough fissile material for at least six to eight nuclear weapons, as well as a military with nearly 1.2 million combat-ready troops.

State media has reported for the past month on the regional appointments of delegates to the conference, and said on Sunday the appointees had arrived in the capital for the meeting.

Kim, who is believed to have suffered a stroke in 2008, has called the conference to elect the party's "supreme leadership body", in a move experts say is part of an overall plan to ensure the continuation of his family's dynastic rule.

Experts say the most market-friendly outcome is an approximate continuation of the current system. The biggest concern are any signs of regime collapse that could result in internal unrest, massive refugee flows and military exchanges.

"North Korea is an unknowable risk," said Shaun Cochran, head of research at the brokerage CLSA in Seoul. "We either see dramatic change or none at all."

Tensions have soured on the peninsula since conservative South Korean President Lee Myung-bak took office in 2008, demanding an end to its nuclear ambitions in return for massive aid and investment from the south.

Relations deteriorated further this year after the South, with US backing, accused the North of torpedoing one of its navy ships, killing 46 sailors. Pyongyang denies the charge and threatened to retaliate by force if Seoul imposed sanctions.

On Monday, the South Korean and US militaries began a joint anti-submarine drill off the west coast near where the South Korean warship sank. It is the second such exercise in response to the sinking of the warship.

Pyongyang condemned the exercise, saying it was a "deliberate military provocation to hamstring the efforts for detente on the Korean Peninsula", state media reported.

The North has made conciliatory gestures in recent weeks, engaging in dialogue with the South over flood aid and family reunions, and also indicating it was willing to restart talks with regional powers aimed at scrapping its nuclear arms projects in return for economic aid.

The last WPK meeting in 1980 marked the start of Kim's own succession, when he himself began his official role to succeed his father and state founder, Kim Il-sung, by taking on a Workers' Party title at the age of 38.

But Kim senior, now 68, is not expected to retire just yet despite declining health, experts say, because his son is considered too young to take over.

Intelligence sources said the North's top military and party officials have been asked to pledge loyalty to Jong-un but the public is still in the dark about his future role, never having even been informed that Kim Jong-il has sons.

In the event Kim Jong-il dies suddenly, analysts expect a collective leadership centred on Jong-un and his uncle Jang Song-taek, who is expected to be promoted to a senior role during the meeting. Experts say Jang will likely act as regent until Jong-un is fully ready to take over.